Megaupload: Kim Dotcom May Regain Possessions, Modern Warfare Crown

Forbes on March 19, 2012 released the following:

“In a potentially embarrassing turn of events for the case against Kim “Dotcom” Schmitz, former head of Megaupload and perhaps the third most famous Kim currently living, it seems that the seizure of his property may be overturned as a result of a misfiled restraint order by the New Zealand Police.

Schmitz, a German national, is currently fighting extradition from New Zealand to the US to be prosecuted on charges relating to copyright-infringing material being made available through Megaupload.com and its partner sites. Although Megaupload did not directly sell the allegedly infringing content, it profited from advertising revenues based on page views and subscription fees from premium members. According to the indictment, the damage to copyright holders from Megaupload’s activities totals more than $500,000,000 – although the statistical metrics behind this calculation remain uncertain.

According to a report in the New Zealand Herald, Dotcom’s assets were impounded under an order which precluded the possibility of Him mounting a legal defense to re-acquire them. Described as a procedural error, this will nonetheless look to critics of the handling of the case like the misuse of extreme legal measures designed to battle terrorists and avert loss of life. This narrative has been ongoing since the deployment of armed STG officers – the New Zealand equivalent of SWAT – in the initial raid. Schmitz is a keen and fierce competitor in Activision’s Modern Warfare video game: one consequence of his incarceration before release on bail was the loss of his status as Modern Warfare 3′s highest-ranking multiplayer competitor. This will make for an interesting emotional damages claim in any countersuit.

New Zealand’s Crown Law Office – mindful, no doubt, that when they mess up it makes the Queen look bad – promptly applied for the correct restraining order, listing for seizure items that had already been seized under the previous order. Justice Judith Potter has already declared that the initial order was null and void, and will shortly address claims by Schmitz’ legal team that the property should be returned to their client’s control forthwith.

If the property is returned, along with a number of servers and tools of his trade Schmitz will be able once again to enjoy his Predator Statue, $17,500 Devon Tread 1 wristwatch and perhaps enjoy a game of Call of Duty: Modern Warfare 3 on one of the many enormous TV screens which were seized in the initial raid. Having secured a release on bail in spite of FBI opposition, Schmitz recently made statements to the file-sharing news site Torrentfreak expressing the hope that will soon to be able to reveal the identities of his site’s biggest users in the Department of Justice. If this tactic – of apparently trolling the case against – pays off, Schmitz may be able to say to his prosecutors, as he did to his victims on the virtual battlefield:

“Don’t hate me because I beat you. Respect me because I teach you :)”

However, the DoJ, whose lack of a sense of humour is generally comsidered a feature rather than a bug, may prove a tougher foe than 15 million Xbox antagonists. It’s not all bad news for American copyright abroad – nearer to home, the Crown signed off on the quickie extradition of Richard o’Dwyer for sharing links to copyright-infringing material on his TVShack website, using an extradition act signed hurriedly into law in 2003 as a vital tool in the war against terror. If the line between piracy and terrorism becomes blurred in the eyes of content providers and lawmakers, Dotcom may yet have cause to regret his vaunted gift with a virtual assault rifle.”

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.